More than a quarter of Britain's largest companies want to offload their final salary retirement schemes to the new breed of pension buyout funds to escape the increasing costs and regulation of guaranteed pension plans, according to a report yesterday.

Around 11% of employers are considering a sale of their final salary scheme in the next five years and 16% over a longer period, the report by accountants PricewaterhouseCoopers said.

The trend is also fuelled by a rise in the stock market over the last four years, increases in interest rates and booming corporate profits, which have cut the costs of selling the expensive plans to third parties.

The report is expected to fuel fears that a growing number of employers will view the current climate as the ideal opportunity to separate themselves from their pension liabilities. Most firms have closed their expensive guaranteed pension plans to new entrants. Only a handful have so far closed them to existing members. Even fewer have offloaded them to one of the new buyout funds set up to run final salary schemes at a profit.

Employers that have taken this step include the Institute of Chartered Accountants in England & Wales and Thomson Regional Newspapers.

The report's findings were supported by figures from buyout fund Paternoster, which said the total value of assets on its books had reached £406m, an increase of 21% on the previous quarter.

Mark Wood, the fund's chief executive, said the market was growing rapidly. "On average, in the first half of the year, we provided quotations on £2bn worth of business each month. Subsequently, July saw £3.5bn of business being quoted on, August £4.6bn and September £4.9bn. These quotation volumes suggest that in 2007 the market for defined benefit risk transfer could grow by between 200% to 300% over 2006."

PwC said it expected a period of energetic trading of pension schemes spurred by the 20 new companies which have been set up in the last two to three years to buy pension scheme liabilities.

Spokesman Marc Hommel, said: "We are seeing a surge of interest from employers of all shapes and sizes looking to rid their balance sheets of pension liabilities. This is being driven by a feeling of loss of control over pension scheme financing fuelled by recent investment market volatility and, in some cases, overly prudent scheme funding demands from trustees."

However, Mr Hommel warned that while it may appear attractive, selling a pension scheme is not always in the best interests of the employer and pension scheme members.

"There are many options open to employers that want to reduce the pension risk to their businesses including keeping the pension scheme and managing it differently. The optimal solution will be unique to each company," he said.

Unions, which fear buyouts will also result in cuts in retirement payouts to workers, have argued that the disappearance of large pension deficits is a reason to keep final salary schemes open. They said employers should retain pension plans with at least some guarantees as a recruitment tool to attract new staff.

State we'll be in

More than half of workers believe the state pension will wither in value and be almost worthless when they retire, according to a survey yesterday. Pension consultants Towers Perrin said only a quarter believe the basic pension will retain its current value. Eight out of 10 of the under 35s surveyed said they believed the state pension would have disappeared by the time they retire, with nearly half expecting to be worse off in retirement than their parents.